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Grace Agada: Learn about the Four Levels of Financial Success so You Can Move Through Them



Financial success is broken down into four levels and you are at one of these levels, regardless of where you are in your life. The pursuit of financial success is not the pursuit of money, but the pursuit of attaining certain financial levels. The secret to attaining financial success is in the speed with which you can move from where you are now to where you want to be.

How much financial success do you want in your life and how ready are you to achieve it? What do you need to do to move from where you are now to where you need to be? Let’s explore the four levels of financial success, how to know where you are, and what to do to move to your next level.

The four levels of financial success are:

  • Financial Dependence
  • Financial Independence
  • Financial Freedom
  • Wealth

Financial Dependence

A person is financially dependent when they earn a source of income but cannot do without that income for any length of time. Financial dependence is income dependence; that is, a person cannot hand off salary without major consequences to their current living standard.

There are certain circumstances that can cause temporary loss of income, and when things like job loss, salary slashes and downsizing happen, the ability to survive for a short time without salary is critical. If your living standard, peace of mind, and stability will be disrupted in the absence of an income for a few months, you are at the financial dependence level. People who are financially dependent include those that live from paycheck to paycheck, those that have less than three month’s worth of income in savings, and those that are in debt.

Attributes of people at the financial dependence level:

  • They are always running out of money.
  • They are the least prepared for a layoff, job loss, or downsizing.
  • They suffer enormous financial stress.
  • They have fewer options, less work flexibility, and less control over their time.
  • They are usually rushed by economic circumstances to settle for less than they deserve.
  • They stay longer in unhealthy job conditions.
  • They can be stranded by the smallest emergencies.
  • They miss out on opportunities due to their inability to take action.
  • They can barely take time off work for leisure or rest.
  • They are less desirable and more likely to become a burden in retirement.

How to know you are dependent

You cannot do without your salary for at least 3 months, your life is funded from one source of active income that requires ongoing work, and you suffer enormous financial stress.

What to do if you are dependent

Increase your savings and then increase your income in that order. If you increase your income before your savings, you will achieve a little result. There is a reason why you are at this level and this reason must be sorted out first before any additional income can move you to the next level.

Financial Independence

A person is financially independent when they have 6, 12, or 24 months worth of income in savings or liquid investments, and can survive without a salary for months. If a few months of salary loss will not significantly impact your life, you are financially independent. Financially independent people include people with solid cash reserves, interest yielding liquid investments, and a few other investments that produce passive income.

Attributes of financially independent people:

  • They can afford to take a few months off work without financial stress.
  • They can say no to less pay and unhealthy working conditions.
  • They are perceived to be valuable and can be easily promoted.
  • They can afford to speak their minds and give candid opinions without fear of losing their jobs.
  • They are not at the mercy of anyone.
  • They are closer to financial freedom.

How to know you are financially independent

You have at least 3-24 months worth of income in savings or liquid investments. You also have other passive income generating investment outside salary that can pay a certain percentage of your bills.

What to do if you are independent

Invest in ways that increase your passive income so you can become financially free.

Financial Freedom 

A person is financially free when they can fund their lives from a passive source of income. That is, their collection of investments produces enough passive income that can carry the weight of their bills or lifestyle. Financial freedom is about depending on one’s passive income investments. For these investments to be effective, they must be consistent and regular, just like a salary. They must be investments that cannot be lost easily. That way, you never run out of passive income. Becoming financially free on an ongoing basis is the utmost level that every individual should strive to achieve. If you want to never have to work again, exit the corporate world or prepare for retirement, this is the level you should be in.

Attributes of financially free people:

  • They work because they want to, not because they have to.
  • They can afford to quit or resign at any time.
  • They can take time off or shave off years of ongoing work.
  • They can help a lot more people and be generous in their families, neighbourhood, or religious organization.
  • They have better options and can negotiate better pay or working conditions.
  • They are more admirable, attractive, and can make more friends.
  • They are more disciplined and focused.
  • They have a better chance of success in the business world.
  • They are an asset to their families and not a liability.

How to know you are free

You are free when your life is funded by a passive investment income. That is, you have successfully moved your source of livelihood from an active source of income that ends at retirement to a passive source of income that lasts for a lifetime.

What to do if you are free

Move to the wealth level.

The first three levels of financial success are all about you. The focus is to help you and your family achieve financial security. This is where most people stop. But if you are ambitious and want to go beyond just helping yourself and family to helping many other people, then the fourth level of financial success is where you need to be.


A person is wealthy when they own and run a successful business or businesses that generate predictable passive income and multiple streams of revenue. This business(es) should afford them freedom and a luxurious life. Creating wealth through a business is about helping other people – beyond your family – become who they want to be. It is about expanding your capacity to do more good and make the world a better place. With your knowledge, products, and services, you can help a lot of people. The more people you help, the wealthier you become, and the happier you become too.  Striving for wealth is about creating global impact, contribution, and building lasting legacies.

Attributes of wealthy people:

  • Have multiple passive incomes and active income streams.
  • They enjoy a no-limit income – income that has no retirement date.
  • They can serve as many people as they want and increase their wealth at will.
  • They have massive control over their sources of income.
  • They have time and work freedom.
  • They can help a lot more people.
  • They can build an immortal legacy that is beyond their immediate family.

How to know you are wealthy 

You have a successful business that has predictable cash flow, many channels of income, and products and services that serve humanity.

What to do when you are wealthy

Increase your impact and wealth so you can help more people.

Regardless of whichever stage you are today, you can begin to take actions that will move you to your next level. The key to success is to know exactly what you want, what you need to do to move and get the help you need to make the giant leap.


Photo by Jopwell from Pexels

Grace Agada is The Senior Financial Happiness Director @ Create Solid Wealth. She is an Author, Column Contributor in Six National Newspaper, and Trainer with a mission- To help working-class professionals and CEOs become more financially successful. To learn more about Grace and how she can help you download this FREE Report: "The 18 Essentials for Financial success in the 21st century".

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